There are a number of advantages to getting an in-house car loan from a local car lot. With this type of loan, you get financing directly from the dealer and there is no credit check. Although these Canadian dealers have helped many people finance a car, it may not be the best choice for a bad credit car loan Canada.
If you are unfamiliar with the retail car business, you may not know what in-house financing is. In the States, it’s called buy-here, pay-here or “tote the note”, but no matter what you call in-house financing, it refers to a car dealer where you can not only buy a car, but a dealership where you can finance it, right there, with money that you actually borrow from the dealer instead of a bank, credit union or finance company.
Many customers in the market for a car - especially if they have bad credit – start by going to one of these dealers, thinking that they have no choice other than an in-house financed car loan. These customers think that because they don’t have a high FICO score, no regular car dealer will be able to get them approved for a loan. In many cases, this may be true. Here’s why:
For many customers that have a short time on the job (less than 3 years without a co-signer) a low income, say $500 per month, or no credit history, the chances of getting financed at a regular dealer are pretty slim. For these customers, in-house financing may be the only way that they can finance a car. But many people who believe that the “dealer financed” arrangement is their only option may be surprised at the number of other opportunities for financing that they really have.
The big advantage of an in-house finance arrangement is the fact that these dealers don’t require credit checks. But this also means that, in most cases, repaying this type of loan does not help your credit score, since most of these dealers don’t report your good payment history to the credit bureaus.
So if you are looking for a bad credit car loan Canada and you have at least 3 years on the job, you might want to consider an online car loan site that specializes in car loans for people with bruised credit. The best of these web sites work with a nationwide network of dealers – from Nova Scotia to British Columbia – that do business with a wide array of lending companies to get you approved. These loans require a credit check, but once you are approved, each month that you make a car payment you are taking one more step in rebuilding your credit score and reestablishing your financial future.
